Paying for Employee Training Time

Dow Chemical’s plant in Freeport, Texas recently had to pay a $861,647 settlement for back wages to 648 operating engineers who claimed they were not compensated for hours spent studying during mandatory training. The Department of Labor (“DOL”)investigated and found that the engineers should have been paid for the time spent in training required by the company.

If you want to make sure that you don’t get hit with penalties for the way in which you pay your employees for training and meeting times, here a few guidelines for paying your employees correctly :

  • The basic regulation states “”Attendance at lectures, meetings, training programs and similar activities need not be counted as working time if the following four criteria are met: (1) attendance is outside of the employee’s regular working hours; (2) attendance is in fact voluntary; (3) the course, lecture or meeting is not directly related to the employee’s job; and (4) the employee does not perform any productive work during such attendance.”
  • Unless you can prove that the meeting or training course that your employee attends meets all four of these criteria, you must compensate the employee for the time in the meeting or the training. Most business meetings and trainings will not meet these criteria, so you will have to compensate your employees for them.
  • An example of meetings that would not have to be compensated would be nonprofit board meetings, which could benefit your employee’s career in the long run, but are usually voluntary on the employee’s part and not directly related to your business. Also “meetings” such as happy hours after work or playing on the company softball team, while indirectly involving working relationships, fit these criteria so do not have to be compensated.
  • On the other hand, a lunch time meeting to talk about staff assignments, a Saturday session for employees to pack up to move the business to a new location, or a nighttime cocktail hour to entertain prospective clients of the company are all the types of meetings that would require you to compensate your employees.
  • The DOL takes the position that training that is required by law to allow the employee to work for you, such as the 15 hours of annual training required of child care workers every year in Texas, is compensable because the training is directly related to the job and is not voluntary because the employee cannot work in that job without it. Interestingly, it is the DOL’s position that mandatory annual continuing education for professionals, such as accountants and lawyers, is of general applicability and is “portable” in that profession. Therefore, the employer doesn’t have to compensate the professional for that training time. Of course, the professional is probably exempt from the overtime requirements and paid on a salary, so no extra compensation would be due anyway.
  • If an employee decides to go back to college or trade school on his own initiative, the employer does not have to pay the employee for that time even if the courses are related to the employee’s work because the employer did not require the employee to go back to school or otherwise make going back to school a job requirement. The employer can even agree to reimburse those college courses that apply to the employee’s job, as long as the employee is voluntarily attending school on his own accord.

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